–Adds Comments From Hollande, Other Leaders
BRUSSELS (MNI) – German Chancellor Angela Merkel said Friday that
EU leaders had agreed “precise conditions” under which to allow bond
buys by the EU’s rescue funds and which would be monitored by the
so-called “Troika.”
Speaking ahead of the second day of the EU summit here, Merkel said
the conditions would be attached “if Spain or Italy for example” were to
make use of such bond-buying to lower their yields. The deal reached in
the early hours of Friday means the principle of aid only with
conditions – “no performance without counter-performance” – remains
intact, she said.
French President Francois Hollande said the bond-buying plan was
part of a package of “efficient, very short-term” measures to help
Eurozone countries in need of immediate relief.
EU leaders also agreed to the possibility of direct bank
recapitalizations by the European Stability Mechanism in future, once a
single bank supervisor has been set up. Merkel said it was clear that
this, too, would have conditions attached.
Hollande said the role of bank supervisor would fall to the
European Central Bank over the coming months. Countries “must accept
that there will be a transfer of responsibility” for bank supervision,
he said.
Belgian Prime Minister Elio di Rupo said the “most important”
element of the accord early Friday “is that we strengthened the euro.”
Attention will now turn to the longer-term vision for the
Eurozone’s future. Austrian Chancellor Werner Faymann said it was
“appropriate” that EU leaders spent the first day focused on short-term
aid before turning to long-term plans.
Austria will be pushing for common deposit guarantees as part of
any future banking union. Faymann said the EU’s growth pact and other
measures would be of little help “if people’s money is not secure.”
— Frankfurt bureau: +49 69 720 142; email: ccermak@marketnews.com
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